EXECUTIVE PAY.: The Great Game of Gimmicks

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Besides such BIR-approved plans, almost every company gives its top men special privileges that amount to extra compensation. An aluminum company keeps a lodge in Tennessee, with a nine-hole golf course, where its brass entertains top customers and gets some free relaxation in the process. Similarly, steel executives sometimes cruise the Great Lakes on ore boats which have been fitted out with sumptuous guest cabins and offer superb cuisine. Some oil-company tankers have guest cabins almost as luxurious as anything on the Queen Mary. One big electrical-equipment company recently bought a fancy yacht on which its executives can entertain customers—and themselves. An Akron rubber company sometimes uses its Arizona experimental farm as a dude ranch for officials. A Detroit company offers the choice of two vacation spots: an apartment house in Florida, a resort hotel on a Michigan lake. Some Southern textile mills, scrambling for executive talent, provide free housing, even free servants.

All these devices may be a tribute to the ingenuity of big business. But they may sometimes be more a hindrance than a help to its efficiency. Many promising younger executives leave big business altogether to try to start ventures of their own, in hopes of turning a capital gain at a lower tax rate.

So long as the tax structure continues to take so big a bite from top-bracket salaries, U.S. industry's great gimmick game will continue, and corporations will keep on looking for new and ever more ingenious ways of paying their best men rewards commensurate with their contributions. But their ingenuity may be taxed still more when the excess-profits tax expires next January. Then many of the company-paid luxuries now winked at as business expenses may suddenly look too expensive to be continued.